Applied to lower investments in SunFab

SAN JOSE, Calif. -- Applied Materials Inc. plans to lower its investments in its SunFab solar technology amid disappointing results in the arena.

Applied is not dropping SunFab. It will continue to sell the SunFab technology to customers and will continue to honor contracts in the arena.

But the technology has not lived up to its promises. Applied sells both standalone solar tools as well as a turnkey solar line, dubbed SunFab. SunFab is based on a thin-film technology called amorphous silicon. Applied has sold turnkey SunFab lines to a number of customers.

The trouble is that SunFab's customers are suffering from price pressures from conventional crystalline silicon-based solar modules. For the most part, thin-film technology is not keeping up with silicon-based products in terms of prices.

''In reality, the market has not come to fruition as we had hoped,'' said Michael Splinter, chairman, president and chief executive of Applied Materials, during an analyst meeting in New York. ''We are taking our spending down in that space.''

Splinter did not elaborate, but he said the company will continue to develop and sell the technology.

It will also honor contracts, he said. The SunFab unit, however, must ''stand on its own,'' he said.

Applied had been dogged by rumors about the performance of the SunFab equipment. Last year, a privately-held company has cut the value of a previously announced order for Appled Materials' SunFab solar panel production equipment to $250 million from $1.9 billion.

On the positive side, the overall solar market is back on track after a downturn. The solar market is ''back to 30 percent growth,'' he said.

Applied itself hopes to be profitable in solar this year. The company's fab tool business is strong and it expects to gain 2 percent market share in 2010, he added.

Applied zoomed to the top spot among providers of photovoltaic (PV) manufacturing equipment in 2008, its first full year in the market, according to market research firm VLSI Research Inc.

Applied (Santa Clara, Calif.) notched $797 million in revenue from equipment for manufacturing crystalline solar cells and integrated thin-film solar production lines, according to VLSI Research. Applied bested by a wide margin Oerlikon Solar, the second leading provider of PV manufacturing equipment with revenue of $552 million, the firm said.